Holding of Annual General Meeting (AGM) Through Video Conferencing (VC) or Other Audio Visual Means (OAVM) Companies Which Are Required To Provide The Facility of E-Voting Under The Act, or Any Other Company Which Has Opted For Such Facility

Applicability of General Circular No. 20 /2020 dated May 05, 2020

General Circular No. 20/ 2020 dated MAY 05, 2020 is applicable to all companies irrespective of the financial year followed by a company. As per the said General Circular, all companies are permitted to conduct their AGM through video conferencing (VC) or other audio visual means (OAVM), during the calendar year 2020, subject to the fulfillment of the requirements stated in the general circular.

The above mentioned general circular applies to companies and as per Section 2(20) of the Companies Act, 2013, company means a company incorporated under this Act or under any previous company law. As banks are registered under the Banking Regulation Act, 1949 and same are not included within the definition of companies as defined under the Companies Act, 2013, banks will not fall within the ambit of above circular.

Checklist for companies which are required to provide the facility of e-voting under the Act, or any other company which has opted for such facility

PRIOR TO THE MEETING

1. Necessary arrangements to be made for recording the transcript of such meeting. Such transcript to be maintained by the company in safe custody.

In case of a public company, such companies are also required to post the transcript of the website, if any of such company.

2. Convenience of different persons positioned in different time zones to be kept in mind before scheduling the meeting.

3. All care must be taken to ensure that such meeting through VC or OAVM facility allows two way teleconferencing or webex for the ease of participation of the members and the participants are allowed to pose questions concurrently or given time to submit questions in advance on the e-mail address of the company.

a. Such facility must have a capacity to allow at least 1000 members to participate on a first-come-first-served basis.

b. The large shareholders (i.e. shareholders holding 2% or more shareholding), promoters, institutional investors, directors, key managerial personnel, the chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors, etc. may be allowed to attend the meeting without restriction on account of first-come first-served principle.

4. The facility for joining the meeting shall be kept open at least 15 minutes before the time scheduled to start the meeting and shall not be closed till the expiry of 15 minutes after such scheduled time.

5. Before the actual date of the meeting the facility of remote e-voting shall be provided in accordance with the Act and the rules.

Notice

Mode Dispatch of Notice

In accordance with the provisions of rule 18 of the Companies (Management and Administration) Rules, 2014 (the rules), the notices to members may be given only through e-mails registered with the company or with the depository participant/depository.

A copy of the meeting notice shall also be prominently displayed on the website of the company and due intimation may be made to the exchanges in case of a listed company.

Contents of the Notice

1. The notice for the general meeting shall contain clear instructions on how to access and participate in the meeting. The company shall also provide a helpline number through the registrar and transfer agent. technology provider, or otherwise. for those shareholders who need assistance with using the technology before or during the meeting.

2. That the company is providing facility for voting by electronic means and the business may be transacted through such voting.

3. That the facility for voting, either through electronic voting system or ballot or polling paper shall also be made available at the meeting and members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting.

4. That the members who have cast their vote by remote-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again.

5. Indicate the process and manner for voting by electronic means.

6. Indicate the time schedule including the time period during which the votes may be cast by remote e-voting.

7. Provide the details about the login ID.

8. Specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.

9. Specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.

Additional information required to be included in the notice pursuant the MCA General Circular 20/ 2020

1. A statement that the EGM has been convened through VC or OAVM in compliance with applicable provisions of the Act read with General Circular 14/2020. dated 8th 2020 and this Circular,

2. The date and time of the EGM through VC or OAVM.

3. Availability of notice of the meeting on the website of the company and the stock exchange.

4. The manner in which the members who are holding shares in physical form or who have not registered their email addresses With the company can cast their vote through remote e-voting or through the e-voting system during the meeting;

5. The manner in which the members who have not registered their email addresses with the company can get the same registered with the company;

6. Any other detail considered necessary by the company.

Financial statement and Auditor’s Report

Financial statements (including board’s report, Auditor’s report or other documents required to be attached along with the notice), such statements shall be sent only by email to the members, trustees for the debenture-holder of any debentures issued by the company, and to all other persons so entitled.

Newspaper Advertisement

A. Prior to release of notice

Before sending the notices and copies of the financial statements, etc., a public notice by way of advertisement be published at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, preferably both newspapers having electronic editions, and specifying in the advertisement the following information.-

a. statement that the AGM will be convened through VC or OIVM in compliance with applicable provisions of the Act read with this Circular:

b. the date and time of the AGM through VC or OAVM;

c.availability of notice of the meeting on the website of the company and the stock exchange, in case of a listed company;

d. the manner in which the members who are holding shares in physical form or who have not registered their email addresses with the company can cast their vote through remote e-voting or through the e-voting system during the meeting;

e. the manner in which the persons who have not registered their email addresses with the company can get the same registered with the company;

f. the manner in which the members can give their mandate receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means;

g. any other detail considered necessary by the company

Public Notice after the release of AGM Notice

Company shall cause a public notice by way of an advertisement to be published, immediately on completion of dispatch of notices for the meeting at least twenty-one days before the date of general meeting, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having country-wide circulation, and specifying in the said advertisement, inter alia,. the following manners namely :-

(a)statement that the business maybe transacted through voting by electronic means;

(b) the date and time of commencement of remote e-voting;

(c)the date and time of end of remote e-voting;

(d)cut-off date;

(e) the manner in which persons who have acquired shares and become members of the company after the dispatch of notice may obtain the login ID and password;

(f)the statement that-

(A) remote e-voting shall not be allowed beyond the said date and time;

(B) the manner in which the company shall provide for voting by members present at the meeting; and

(C) a member may participate in the general meeting even after exercising his right to vote through remote e-voting but shall not be allowed to vote again in the meeting; and

(D) a person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting in the general meeting;

(g) website address of the company, if any, and of the agency where notice of the meeting is displayed; and

(h) name, designation, address, email id and phone number of the person responsible to address the grievances connected with facility for voting by electronic means.

DURING THE MEETING

Quorum

1. Attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.

2. At least one independent director (where the company is required to appoint one), and the auditor or his authorized representative, who is qualified to be the auditor shall attend such meeting through VC or OAVM.

3. Where institutional investors are members of a company, they must be encouraged to attend and vote in the said meeting through VC or OAVM.

Chairman

Unless the articles of the company require any specific person ‘to be appointed as a Chairman for the meeting, the Chairman for the meeting shall be appointed in the following manner:

a. where there are less than 50 members present at the meeting. the Chairman shall be appointed in accordance with section 104,

b. in all other cases, the Chairman shall be appointed by a poll conducted through the e-voting system during the meeting.

The Chairman of  the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts under the circumstances have indeed been made by the company to enable members to participate and vote on the items being considered in the meeting.

Voting

1. Only those members who are present in the meeting through VC or OAVM facility and have not cast their vote on resolutions through remote e-voting and are otherwise not barred from doing so, shall be allowed to vote through e-voting system or by a show of hands in the meeting.

2. The Chairman present at the meeting shall ensure that the facility of e-voting system is available for the purpose of conducting a poll during the meeting held through VC or OAVM. Depending on the number of members present in such meeting. the voting shall be conducted in the following manner:

a. where there are less than 50 members present at the meeting, the voting may be conducted either through the e-voting system or by a show of hands, unless a demand for poll is made in accordance with section 109 of the Act, in which case, the voting shall be conducted through the e-voting system;

b. in all other cases, the voting shall be conducted through e-voting

3. The facility for remote e-voting shall remain open for not less than three days and shall close at 5.00 p.m. on the date Preceding the date of the general meeting.

4. During the period when facility for remote e-voting is provided, the members of the company, holding shares either in physical form or in dematerialized form, as on the cut-off date, may opt for remote e-voting:

a. Once the vote on a resolution is cast by the member, he shall not be allowed to change it subsequently or cast the vote again.

b. A member may participate in the general meeting even after exercising his right to vote through remote e-voting but shall not be allowed to vote again.

5. At the end of the remote e-voting period, the facility shall forthwith be blocked:

If a company opts to provide the same electronic voting system as used during remote e-voting during the general meeting, the said facility shall be in operation till all the resolutions are considered and voted upon in the meeting and may be used for voting only by the members attending the meeting and who have not exercised their right to vote through remote e-voting.

6. For the purpose of ensuring that members who have cast their votes through remote e-voting do not vote again at the general meeting, the scrutinizer shall have access, after the closure of period for remote e-voting and before the start of general meeting, to details relating to members such as their names, folios, number of shares held and such other information that the scrutinizer may require, who have cast votes through remote e-voting but not the manner in which they have cast their votes.

Scrutiniser

1. One or more scrutiniser to be appointed, who, in the opinion of the Board can scrutinise the voting and remote e-voting process in a fair and transparent manner.

The scrutiniser shall, immediately after the conclusion of voting at the general meeting, unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the company and make, not later than three days of conclusion of the meeting, a consolidated scrutinizer’s report of the total votes cast ln favor or against, if any, to the Chairman or a person authorised by him in writing who shall countersign the same.

2. The Chairman or a person authorised by him in writing shall declare the result of the voting forthwith.

3. The register and all other papers relating to voting by electronic means shall remain in the safe custody of the scrutinizer until the Chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall hand over the register and other related papers to the company.

Proxy: No requirement of appointment of proxies

A proxy is allowed to be appointed under section 105 of the Act to attend and vote at a general meeting on behalf of a member who is not able to attend personally. Since general meetings under this framework will be held through VC or OAVM, where physical attendance of members in any case has been dispensed with, there is no requirement of appointment of proxies. Accordingly, the facility of appointment of proxies by members will not be available for such meetings. However, in pursuance of section 112 and section 113 of the Act, representatives of the members may be appointed for the purpose of voting through remote e-voting or for participation and voting in the meeting held through VC or OAVM.

Dividend

In case, the company is unable to pay the dividend to any shareholder by the electronic mode, due to non-availability of the details of the bank account, the company shall upon normalization of the postal services, dispatch the dividend warrant  to such shareholder by post.

Issue of Notice Prior to the May 05, 2020

In case a notice for meeting has been served prior to May 05, 2020, the framework proposed in Circular no. 20/2020 may be adopted for the meeting, in case the consent from members has been obtained in accordance with section 101(1) of the Act, and a fresh notice of shorter duration with due disclosures in consonance with this Circular is issued

POST MEETING COMPLIANCES

1. All resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies within 60 days of the meeting, clearly indicating therein that the mechanism provided herein along with other provisions of the Act and rules were duly complied with during such meeting.

2. The results declared along with the report of the scrutiniser shall be placed on the website of the company, if any, and on the website of the agency immediately after the result is declared by the Chairman.

Provided that in case of companies whose equity shares are listed on a recognized stock exchange, the company shall, simultaneously, forward the results to the concerned stock exchange or exchanges where its equity shares are listed and such stock exchange or exchanges shall place the results on its or their website.

Resolutions

1. In such meetings, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted.

2. Subject to receipt of requisite number of votes, the resolution shall be deemed to be passed on the date of the relevant general meeting.

Explanation – For the purposes of this clause, the requisite number of votes shall be the votes required to pass the resolution as the ‘ordinary resolution’ or the ‘special resolution’ as the case may be, under section 114 of the Act.

A resolution proposed to be considered through voting by electronic means shall not be withdrawn.”

Holding Physical Meeting

In case, the company has received the permission from the relevant authorities to conduct its AGM at its registered office, or at any other place as provided under section 96 of the Act, after following any advisories issued from such authorities, the company may in addition to holding such meeting with physical presence of some members, also provide the facility of VC or OAVM, so as to allow other members of the company to participate in such meeting. All members who are physically present in the meeting as well as the members who attend the meeting through the. facility of VC or OAVM shall be reckoned for the purpose of quorum under section 103 of the Act. All resolutions shall continue to be passed through the facility of e-voting system.

Other Compliances:

Other compliances associated with the provisions relating to general meetings viz making of disclosures, inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc. as provided in the Act and the articles of association of the company are made through electronic mode.

Reference:

1. The Companies (Management and Administration) Rules, 2014

Rule 20 – Voting Though Electronic Means

Rule 18 – Notice of the Meeting

2. MCA General Circular no. 14/ 2020 dated April 08, 2020

3. MCA General Circular no. 17/ 2020 dated April 13, 2020

4. MCA General Circular no. 20/ 2020 dated May 05, 2020

Extension of AGM:

The companies which are not covered by the General Circular No. 18/ 2020 dated April 21, 2020 and are unable to conduct their AGM in accordance with the framework provided in this Circular are advised to prefer applications for extension of AGM at suitable point of time before the concerned Registrar of Companies under section 96 the Act.

Team Periwinkles’

CS Jaya Yadav & Anishi Sharda

For Whitespan Advisory

DISCLAIMER: The Entire Contents of this document have been prepared on the basis of relevant provisions and information available at that time and prepared with due accuracy and reliability. But in no event, I will be liable for any damages caused in connection with the use of this information.

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